tv Bloomberg Technology Bloomberg March 25, 2019 5:00pm-6:00pm EDT
♪ chang in sanily francisco and this is "bloomberg technology." apple meets hollywood. after months if not years of speculation, the iphone maker unveils its streaming plan with a star-studded event with steven spielberg, reese witherspoon, even oprah. a lot of excitement but also lots of questions. the roadshow in san francisco, met by disgruntled drivers
hoping to make their feelings known to executives and drivers. to their surprise, the company changed the location of the event. the sec is urging a judge to take action against elon musk for flouting an agreement to take more caution with his tweets. the latest on the most recent controversy surrounding the tesla ceo. our top story. years,eeks, months, apple has finally revealed it is all in as a services company on monday. they unveiled a new magazine service, a video gaming platform, and with a parade of hollywood elites from jennifer aniston, steve carell, even oprah, a new premium video service to rival the likes of netflix and amazon. listen to ceo tim cook. tim: to bring together your favorite shows, movies, sports, and news, and make them
available on all your devices. -- you can spend less time looking for something to watch and more time enjoying it. emily: apple has a brand-new credit card facilitated by goldman sachs to facilitate payment. the card is attached to apple pay, which they say has been adopted by 39% of mobile payment users. mark gurman.h's of tech -- of technalysis. what did we learn about the tv service besides seeing a lot of stars that we already knew were connected to it?
>> we learned pretty much nothing to be honest. we knew which shows were coming every time a new show went into development or was closing in on filming. the actorsproducers, and actresses involved, would very prominently announce these deals. we knew this would be a subscription service. we knew it would be premium. what we didn't know is how much they would charge for it, and we didn't know which devices it would be supported on. apple didn't come right out and say it but my sense is these shows will be available on samsung, sony, in addition to the amazon and roku boxes. no word on if these are going to be on amazon or android phones and tablets. we also don't know price. they didn't talk about the price. i'm not sure they are 100% certain what the price will be. as apple channels, same name amazon channels.
that is what investors care about, prices and the comparison to netflix and amazon prime. emily: offering a bundle of tv channels which will include hbo, showtime, starz. they obviously pulled out all the stops. it was cool and it shows the priority they are putting on these new services. bob: it was a big, splashy event, which apple is really good at. the question is, how are we going to feel about it tomorrow. tomorrow, we are going to go, wait a minute, what exactly are we going to get from this? there are plenty of other options to get everything except apple's original content. theyll be how compelling can make this total package not just from a features perspective, but from a pricing perspective. ironically, i don't think the tv service was the biggest announcement or the best announcement of the day. i think it was the credit card.
emily: let's listen to jennifer bailey, the vice president of apple pay who unveiled the credit card in association with goldman sachs. using apple card, you get daily cash. not a month from now, but every day. every day you spend, caches card to your apple cash which is also in the wallet app. cash, soh, like real you can do anything with it. anytime you pay with your iphone or apple watch, you will get 2% of the daily amount in apple cash. emily: that was my favorite line of the event. it's cash, like, real cash. apple is getting into the credit card business. things they are offering make a lot of sense and
consumers will probably be excited about this. they had a lot of the points here, the foreign transaction fees, the points fees. you can cycle through a lot of credit cards to get the best sign-up bonuses and optimize spending. we are seeing a 2% flat rate through apple pay and that is the highest in the industry, i believe, for a flat rate, but that is only through your phone. if you are in an environment where you have lots of apple pay around you and you want high cashback, i don't think there's a better card on the market. there are better cars that have better optimization depending on where you use them. the hope is you are charging a lot of your new apple services on this credit card. mark: people have to get used to
paying with their phone still. that's why we see adoption still relatively modest. the credit card proves that apple is still best that hardware because that was the coolest part of the event. having a card with no numbers and everything else, it totally reshapes the way you think about credit cards. that, to me, was apple at its very best. taking something that is hard, has pain points, and making it simple through the apple magic. the question is, how many other industries are capabilities will we see apple do this on down the road? how you deal with paying off things and things people want to know, real world people. emily: let's talk about the new subscription service, $9.90 a month. >> over 300 great magazines.
the wall street journal, the los angeles times, these great premium digital subscriptions, there has literally never been an offer like this before. if you would subscribe to these individually, it will cost you $8,000 per year. with apple news plus, you pay $9.99 per month. if you look at the subscription price for the wall street journal alone, it is over $20 per month. there's some debate online. apple is telling people you get full access to the wall street journal whereas the wall street journal issued a statement from covero that it would not the journal in its totality, that some businesses would be reserved for people paying the full subscription rate to the journal itself.
i think apple will probably get its way here. these magazines, they look amazing on the ipad, but you are talking about an industry that is already resource starved. these magazines and staff -- to these magazines have staff to build out a new apple experience to make it worth it? bob: it is a great question. like you said, they showed great demos again like apple does, the floating city video on the cover of national geographic. but there's a lot of work involved in making that happen. people had opportunities to get digital magazines before. it hasn't really become a huge business. i think this is a good thing apple is doing. i'm not sure it is a huge hit in terms of economic impact. emily: the idea is attractive, right? bob: yes, but apple bought a company that was essentially
offering this service before. mind you, they weren't apple. that does change things a bit. there's a question mark about what they get from the wall street journal and how long they can sustain the interactive versions of their magazines, and frankly how many people are willing to pay for that. at most, you will read a couple of them anyway, the most any buddy could do. excellentnks for your reporting leading up to this event and i'm excited to see what comes next. we will also talk about apple's new gaming subscription service later in the show. coming up, pinterest files to go public, posting more than 250 million active users. lyft'ssistance to roadshow. uber chooses the new york stock exchange for its ipo. you can listen on the bloomberg
eric: what a coincidence. lyft and its investors as part of the roadshow were supposed to go to the omni. a group of protesters, some of them drivers who were upset about how lyft pays its drivers were out to protestant signal to investors that they need to hold lyft accountable. lyft relocated to another location to meet with investors in a more private place. move thed lyft location because of the protest? eric: one person told us it was a matter of space. it does seem a bit convenient that lyft was able to sidestep the protest. either way, i think the protesters were able to get their message out by being in front of a very public hotel where many people thought lyft was going to hold its roadshow.
emily: how do the issues of how lyft and uber, have those, but the roadshow and are investors concerned about them -- have ande, up at the roadshow are investors concerned about them? worry that competition is going to drive pay for drivers up. for lyft and uber to be more profitable, they would need to take a larger share of the bookings. investors would need to be at cross purposes with drivers because there is a pay split. overall, investors want to see uber and lyft grow the pie, which would mean more economic opportunity for drivers of the class, but not the share they are taking on any individual ride. emily: meantime, you are reporting on uber's plan to buy
its middle east rival for $3.1 billion. you were the first to report this deal was in the works and now they are making it official. eric: there are final reports here that a deal could be close. the price tag would mean that case, expanding and -- in a rare case, expanding . be ais soon going to moment where uber is sort of exerting -- is sort of inserting itself in the middle east ahead of a public filing in april. emily: eric, on the roadshow with lyft, thank you. i want to get to the larger ipo
market because it is on fire. pinterest also filed its f1. in new york, bloombergs elizabeth fournier who covers the ipo markets. jackie, friday was a big day. what is your take on which of best ipo's will have the start out of the gate? >> we are really excited about the fact that -- we think this is going to be the best year for ipo's we have seen in ages. emily: ipo's or tech ipo's? >> i would say both. tech ipo's will get the market moving but companies across the board are looking at the tech ipo's in saying, if they perform well, i'm going out, too. emily: what about the fact that lyft is losing half as much money as they are making. jackie: investors are worried
they will not get as much ownership in these companies as they want to. these offers will be oversubscribed. retail investors, institutional investors, everyone is excited emily:. emily:-- everyone is excited. emily: elizabeth, is that what you are hearing? elizabeth: the roadshow today, the sentiment out of the investors we were able to speak to was very positive. like you said, it is oversubscribed. they are in a pretty good position. emily: what about pinterest? we've talked a lot about uber and lyft. jackie: we have a lot of unicorns besides the ones we are talking about today that are in the registration process. who werempanies scheduled for 20, moving to 19.
late 19 moving up to spring. there's a big group in the pipeline. emily: we are also expecting slack potentially to go out this year. aom video quietly filed prospectus on friday which, as i understand it, was pretty strong. elizabeth: they had some good numbers. pinterest are one of those numbers that are still making a lot. butquite profitable slightly more friendly in numbers. we've had some interesting comments today saying that once that starts trading, it could move up north of $10 million quickly. emily: what do you think will set these companies apart? they are all very different, even uber and lyft. jackie: i think that is what is great about this, that we have a diverse group of companies coming to market.
these companies, and a lot of them are platform based companies that have options to take the platforms they have they and really diversify revenue stream, hit a very broad market. heavy consumer facing but b2b plays. all of them have interesting growth stories. emily: if investors are concerned, what are they concerned about? jackie: i think that what is going on right now is the markets are almost back to some of the peak levels. companies are coming out in times where markets are strong, volatility is low, we've got great news on jobs reports, interest rates. there's a lot of positive momentum. it's a great economy. folks are concerned about, can this hold? emily: there was a big market drop on friday, some recovery today. of course some political issues going on.
trade talks restarted between the united states and china. elizabeth: i think the political environment has already impacted the ipo pipeline this year. the shut down at the beginning of the year really set this process back by a couple of months. with the ipo market, we always talk about a window. a good opportunity for companies to get out there. there's a huge amount of supply coming into the market. i think the real question with how markets are looking is whether demand will be there when they get there. when alibaba listed, that was the last time people were talking about a market top and whether we can use ipo's as an indicator for that. which i have a chart here ust insort of the dotcom b
the rearview mirror. we've come a long way up from some lows. i wonder if there is anything that could set this off-track. ,s there a chance that lyft the market capt -- is now one third of what it once was because a lot of optimism didn't pan out? jackie: what is going on right now is these companies have been able to look in the rearview mirror. companies that have gone out in the past 12, 24 months is looking at, i will present metrics to the market, not just financial but nonfinancial. let me make sure that is backed up. let me support both financial and nonfinancial metrics. there's a lot of focus on growth stories and more. these companies are coming to the market very well prepared. emily: but could anything throw them off? jackie: market conditions could
definitely throw things off. growth plans are aspirational. they are ambitions. investors need to take a long-term view. this is not a short-term investment. this is a long-term investment. emily: jackie kelly, ey america's ipo leader. and elizabeth, thank you for your reporting. youtube bows out and apple jumps in to the tv race. youtube pulling back from its grand plan to produce high-end dramas. this is bloomberg. ♪
with the cost it would take to compete with entrenched players now,netflix, amazon and apple. the supreme court will let a amazon's zappos unit go forward. exposed information of millions of customers. zappos argued that customers could not sue without proof of injury, such as pending misuse of their information. at&tl between viacom and staved off a blackout that would have kept customers from seeing channels like nickelodeon and mtv. tensions have increased in the age of cord cutting as providers try to squeeze more money from shrinking pools of subscribers. coming up, apple in hollywood. more permits plans.
emily: apples streaming vision, the introduced one star after another to announce their plans to win over their content -- your content dollars. reese witherspoon, steven spielberg and big bird. outside of apple only content it will tap into hbo and showtime. , we have a principal analyst at creative strategies in new york -- in cupertino. in new york we have an analyst. and we have lucas shaw.
what surprised you about the offering? >> the level of star power. other tech companies, they start with media or streaming or hat -- and have to prove themselves. most people already know and love hollywood. oprah winfrey, jj abrams, some people who will not work with netflix. information and details. we don't know how much it will cost. we don't know how they will roll out shows, what devices they are on. there is a lot to figure out. even tim cook got starstruck when he was thinking oprah for showing up -- he was thanking oprah for showing up. -- timh impact will this cook reduction wiping away a tear. away actually wiping
tear. how will this compete with netflix? carolina: even the one of a few information aside from prices we assuming theirre services and content is going to be available to 100 plus countries, when it is available in the fall. it shows they are going for the broadest market they can reach. also the fact the cap will be available -- the ap will be available not just on hardware but smart television, it shows it is bigger than the base of users may have. did get emotional with oprah. if you look at the content of some of the stories that they have talked about today, there is a lot of duration on what
they want -- get conversation on difficult topics as well. emily: apple has been secretive until this point, and there is still a lot we don't know. we don't really know what apple is doing. we don't know if these new shows are going to be a success. what you think? some of their original content so far has plopped. a morning showas with steve carell and opera, that sounds amazing -- oprah winfrey, that sounds amazing. do you think they can pull this off? lucas: i think they can. apple is showing a shift from being a hardware company into a services provider of solutions. it wasn't just the apple tv plus but also apple arcade. they want to make their devices compelling and differentiate them from other services and
differentiate in terms of making them available in other places. going back to if there will be success, apple news will be on 100 million users by the end of this year. apple music will be 60 million. even if they are half as successful with the apple tv plus rollout, it would be compelling. inputs oneer pressure solutions like netflix to spend even more than i have already been spending with disney and hulu and others -- they have already been spending with disney and hulu and others in something to realize. emily: oprah winfrey put it succinctly and summed up why this could be so big. listen to what she had to say. >> the apple platform allows me to do what i do in a whole new way, to take everything i have learned about connecting to
people to the next level. because they are in a billion pockets, a billion markets. emily: a billion pockets. the thing netflix is feeling pressure -- do you think netflix is feeling pressure? lucas: a little bit. our readings have been consistent. on one hand, a lot of people can succeed. hbo has grown, hulu has grown, there can be space for a lot of winners. believe apple coming into the market is a problem for them. but you also have competition and screen time and leisure time. there is no question apple can lead into that. that could be a problem for netflix especially because apple can use this. andre made a good point because apple can introduce a ok service and get it to tens of millions
of customers through with music, the success hasn't blunted spotify. they have quadrupled in size since apple came along. we will see something similar play out in video where apple can succeed and netflix can too. you can actually access netflix through the current apple tv storefront. what do you think this means for netflix? they are the giant in the room. biggest -- andre: the biggest losers were netflix and roku. content the discovery is becoming more and more critical to help people discover and monetize content. if all of the other services and originals from apple will be easily found along the screen of somebody's apple device and the other devices and netflix is left out of that, and people have to log in to netflix
separately, new original content will be critical to netflix's future because they are losing content from disney and warner media and others. i would be concerned if i was roko even if they were included as one of the devices where the solution will be available from apple, it puts them in a place device manufacturer, where they have been working hard the last year or two to be this operating system of choice and help with content discovery. they are going back to be more of a provider of other people's apps. emily: what are you watching over the next year to see if off? can pull this the sheer size of the platform gives apple a huge advantage even if the service isn't the favorite service. specifically for the tv content i am looking for more than the start we saw today.
i think one of the things we have seen apple do over and over again with content from the app store and music support is support smaller names and franchises. given they can't always make the big hit with big stars, who else are they going to support and how much original content are we going to see? the other critical part is pricing and how apple is going to be bundling these services they have. they will roll out at different times. in a year from now when we are their portfolio is, how much as a user can i buy if -- can i bundle my tv service, music service, new service and cloud all in one easy payment? emily: it'll take time and we will be turning the progress.
also announced gaming services. it will be integrated into the app store and includes 100 exclusive games, after google announced its gaming platform. this is an independent game studio planning to release two new games on apples arcade gaming platform. tell us a bit about what apple arcade means to you in your games. how will it change your business? fundamental transformation because it enables us to compete on equal footing and reach an audience that will be more involved with the games we make. it will be certain all of the ourent that offered, content is free from ads and market transactions. his freedom we wouldn't have necessarily on the regular app
store and still achieve a good result economically. other gamench of makers fell on the activision -- on the announcement of apples arcade. how does this compete with google's stadia? >> it is different altogether. we are talking about you being relaxed with family sharing devices and playing games which are resonant inside those devices. you have a created selection of games where you will have access to freely. services a streaming which is very different altogether and serves different areas of market, hard-core, high-end up to mobile devices. the games are not running on the devices themselves. they are being streamed from google into the devices. emily: can you share details on how much this will cost?
>> i cannot. you must ask our corporate people. we are still waiting on pricing information for apple arcade, but you also produced one of the first games for the apple watch. how impactful was that for your company? is that a big gaming platform? >> it wasn't, but it was interesting to experiment. we were trying to figure out what people were actually going to use apple watch for. people tried fitness and health monitors, but also music and small notifications. there are still successful games, but we don't produce games for the watch anymore. anything new that comes him with a chance to try something new, something that hasn't been done before is exciting and for independent developers, we are always on the hunt for the next big thing. long talked has
about the gaming market and untapped potential. how do you think apple arcade could or will change the gaming market? >> there is a potential to be a transformational staff. on the traditional game market you have very little movement on the top 10 most popular games. we are talking about games generally free to play, which is a lot of money to buy people into the apple system. the more people that buy the game, the better they rank. it is a self-fulfilling prophecy. for developers it is difficult to break into that. the second aspect is how you relate to the game media being offered on things like arcades. we are talking about an ad free experience that is focused on behavior and how the
player interact with the game rather than how you monetize the game. this is a fundamental shift in the approach of how game developers create, and one that the premium, the first choice for people who are discerning about what kind of games they want to play and feel like ind gauging. emily: we will be waiting to see what you deliver for the new apple arcade platform. thank you so much for joining us. still ahead, the fcc calling on the federal court to hold tesla ceo elon musk in contempt. how this could impact his claim over the electric carmaker next. this is bloomberg. ♪ this is bloomberg. ♪
continues. a new judge was asked whether tesla ceo violated his agreement without holding a hearing. they argue he must be held in contempt after a production forecast they claimed -- as required by the settlement. elon musk defended his twitter use, saying they rely on radical interpretation of the order. joining us to discuss, max chafkin. what is the latest? sec hasthe fcc -- the responded to elon musk saying the judge should offer a hearing on this and decide whether or not this tweet from february that elon musk put out without the assistance of his twitter sitter, the person who is responsible for vetting tweets from the ceo of tesla to make sure they don't contain any material information, whether it was ok. elon musk said it was ok based
on the fact it echoed something tesla had already put out and didn't move the stock price. -- said they the was not in the agreement spirit, in connection with the 420 tweet, the plan which nothing happened to take tesla private. emily: are the experts weighing in on who has the better argument? >> if you like the subtext is the tweet we are talking about where it on must said tesla would make half a million cars this year, which he then corrected himself and said it is a runway for 2019, starting in february, it feels like a ticking, tacky complaint. underlying thing is a pattern of lack of respect you might say for the sec.
emily: he has said it is basically an environment -- embarrassment. >> he called it the short seller enrichment. supposed to is protect shareholders. most shareholders for all of the antics still want him to be ceo, still think the company is worth ceo.with him as it puts them in a box where they can try to wrap him on the knuckles again but the real punishment that they could enact would be banning him from being ceo for some time or the -- from the board, and those don't feel realistic given what is going on. it is hard to see how this shakes out. emily: what next moves are we waiting for? >> we will see if the judge requires a hearing or a ruling you know basically saying tesla 's right, it wasn't that big a
deal or coming up with some additional sanction to put on the company. in the background there is all this question tesla stock price has been volatile, and there are questions of demand for these cars. tesla has been changing the price every couple of days with the model three, the midrange sedan. we are waiting to see how all of this kind of negative press or chaotic press affects the demand for cars which tesla really needs to have good business going forward. emily: max chafkin, as always, thank you for keeping us updated on the pay by play -- play by play. now brad stone to wrap up the big apple event. something we haven't talked about this hour is how with every one of these new services, apple said you get your privacy and security. with this credit card, we don't know where to buy or where you
buy it. we don't know what you read. we will not tell anyone. do you think that alone will attract customers? >> tim cook has been drawing that juxtaposition for a long time. he made the argument with the nurser -- new services, they won't track what you read or anything across the web. is it a difference maker for the majority of people outside the bubble, i don't know. i think they could have been better served adding specificity to their announcements today. what do you get with the news plus service. do you get all of the content from partners like wall street journal or the tv plus cap? people were puzzled over the announcement. how much is apple charging? are you getting programming, new programming from apple and other content providers? emily: are you saying oprah
winfrey is not enough? >> they brought out the firepower. it is very impressive but now the people that watch apple closely are puzzling over it, wondering why some of these services appeared to be half-baked in the introductory. emily: i wonder if the sheer size of apple means so many people will use these services anyway, like apple music? >> but that has never been enough. apple has 50 million subscribers, fewer that's part of five -- fewer than spotify. that is why have -- they have been putting -- pushing stuff. they want to keep doing the same with apple tv, putting them on samsung tv. clearly the ecosystem is not enough. the majority-- have smartphones. apple needs to get these on other devices. emily: apple is saying the
services business can get to $50 billion. how important are these offerings? >> hugely important. as device revenue and iphone revenue fell, investors have always been hitting hopes on the -- it is why certain things like the new apple credit card looks promising. apple pushing deeper into people's financial lives, that was one of the most promising announcements from today. apple fans will want this. emily: it is made with titanium. >> we can argue how low those rates are or how innovative the card is. other companies offer something similar. emily: i have a chart that shows iphone revenue falling along with the global smartphone market slowing down which shows how important all of this is for apple to pull off, but the
question is, we still don't know a lot, even with the teasers of the new original shows, there is not much there. >> it is reinforced i believe that apple is not being authentic in these recent event days. the apple tv app, they have redone and app that has been sitting -- an app that has been sitting on people's iphones already for years. withhey are moving forward -- and showtime. now apple is getting the content amazon havetube and before it. it is not innovative. i don't see what they are doing other companies haven't done. we will see if these can be hits. thank you so much for wrapping it all up for us, with so much authority. that does it for this edition of
haidi: welcome to "daybreak australia." i am haidi stroud-watts. shery: i am shery ahn. sophie: i am sophie kamaruddin. we are counting down to asia's major market open. haidi: here are the top stories we are covering. a rally in treasuries sending yields lower while the dollar retreats. tech stocks leading losses. theresa may bracing to lose control of brexit after conceding she doesn't have the votes to drive her bill through parliament.